Easily Understanding Behavioral Segmentation With Proper Examples

Of the various market segmentation techniques, behavioral segmentation is a strategy that involves the division of customers on the basis of their behavior and attitude towards promotional activities. Here is an explanation about behavioral segmentation and its variables with the help of some examples.

Neha B Deshpande

Last Updated: Apr 9, 2018

"Customers are speaking to you implicitly via their behavior, captured in the footprints they leave behind in your systems."

―Robert G. Thompson (Hooked on Customers: The Five Habits of Legendary Customer-Centric Companies)

Market segmentation is one of the most effective techniques of marketing. To optimize your sales, you divide your consumer base on the basis of various parameters. Types of such segmentation are demographic, psycho-graphic, geographical, behavioral segmentation, etc.

As the name suggests, behavioral segmentation believes in studying the behavioral traits of consumers: their likes, dislikes, occasion, attitude, spending patterns, culture, choice, trend, etc. Thus, in the long run, it helps the company develop a smart marketing strategy that will help it improve and expand its customer base. Of course, buyers will behave differently as per different variables. Some may want a pocket-friendly product, while others will look for brand name. Some are always loyal to their brands, some like to stick to old products, whereas others wish to always innovate. Thus, behavioral segmentation can be defined as dividing and sorting customers as per their traits, and accordingly using marketing techniques that will optimize sales.

Types of Behavioral Segmentation

Benefits Sought

What are the benefits sought by the consumer? Suppose, for a food restaurant, does the customer want an area where kids can have some place to play or venture around? This will be the case if you're wishing to target families. A high-profile consumer will prefer good music, a nice ambiance, privacy, etc. Hence, you can focus on these parameters if you want to target high-income consumers.

In case the restaurant is near a high school/university, you'll need to focus on having affordable prices, and have entertainment media such as a television set, etc.

Loyalty

Marketing experts state that it costs much more to find a new customer than to retain an old customer. You can retain the loyalty of your consumers and improve your relationship with them by giving them attractive offers. Many shopping malls usually have a card system, which enables consumers to attain points on every purchase, which can be redeemed to obtain discounts.

Buying Stage

A lot depends on which stage of buying your consumer is. Typically,first he comes to know about the product, then he tries to know what the product offers, does his research, and if he likes it, he buys it. For building potential costumers, you need to target on marketing techniques that will first make them aware of your product. If a consumer is already aware of the existence of your product, you'll need to try to convince him about the benefits he can get out of it,as compared to competitors.

Usage

This refers to the way the customer spends on buying products: it might be the frequency of buying, urgency of buying, etc. A consumer might want restaurant facilities according to the lunch intervals of his office. Women consumers will buy beauty treatments at different intervals as per their choice. A company can divide their consumers as per this frequency, and accordingly have different marketing techniques.

Occasion

This is a very smart way to advertise products. During the holidays, you'll see a big rush for products. Of course, the holidays, traditions, festivals, etc., might differ as per different cultures and regions. You can accordingly target consumers as per these occasions. For example, during World Cup Tournaments, advertisers exploit the opportunity by targeting ardent fans, thus increasing their sales.

Of course, this cannot be said to be an exhaustive list, and people in different geographical locations will exhibit different behavioral traits. Marketers have to understand these behavioral patterns of their consumers, and how they respond to their promotional techniques.

Success Stories: Examples of Behavioral Segmentation

Mountain Dew

They focused more on consumers that were more youthful, and having a sportsmanship attitude. Thereby, they made a youth-centric campaign.

Hyundai

The company's 'Hyundai Assurance Program' is one of the most successful programs, since it bestowed faith on consumers with their various buy-back programs. This attractive incentive was aimed to help those customers who unfortunately might happen to go on a financial downhill. Many other attractive incentives were also further added to this program. Thus, they concentrated on behavioral pattern, and their success was definitely reflected by an increase in their sales.

KFC

They've indeed proved to a strong competitor to other fast food giants such as McDonald's and Subway. They have divided their consumers on the basis of various parameters of behavior, such as calorie-consciousness, taste-consciousness, etc. For those who want to satisfy their taste buds, they provided them with rich quality, high-calorie chicken, and for those who want a healthier option, they offer the low-calorie chicken.

Benefits of Behavioral Segmentation

Due to this marketing technique, you reach the consumers directly, since you direct your efforts in giving what they want. This helps build trust in the minds of consumers, and also helps in making optimum utilization of your marketing costs. If all consumers are subjected to a similar marketing technique, it will work on some of them. However, if you divide them, and market your product, explaining the brownie points in your product, especially, what they're looking for, there are high chances that the consumer will buy your product. Of course, marketing managers can always learn from these success stories mentioned above.

Thus, behavioral segmentation encompasses many factors, such as the geographical location, lifestyle, spending patterns, likes and dislikes, etc. It is a marketing technique that has become very popular in recent times, considering the increase in consumer awareness, increase in competition, and increase in number of choices that consumers have today.